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The Impact of ICT on Technical Efficiency of Vietnam’s Enterprises

Author

Listed:
  • Bui Thi Quynh Dao

    (Faculty of Finance and Banking, University of Economics and Law, VietNam National University, Ho Chi Minh City, Vietnam)

  • Le Thi Thuy Hue

    (University of Economics and Law, VietNam National University, Ho Chi Minh City, Vietnam)

  • Nguyen Ngoc Van Khanh

    (University of Economics and Law, VietNam National University, Ho Chi Minh City, Vietnam)

  • Nguyen Lam Thanh Ngan

    (University of Economics and Law, VietNam National University, Ho Chi Minh City, Vietnam)

  • Vu Thuy Hong Phuoc

    (University of Economics and Law, VietNam National University, Ho Chi Minh City, Vietnam)

Abstract

This research evaluates the impact of ICT on the technical efficiency of firms in 63 provinces and cities in Vietnam. We apply to use the DEA method in which we use the variable return to scale to evaluate because firm sizes in 63 provinces are different. At the same time, this method aims to minimize input factors without reducing output factors to measure technical efficiency. This result that is used a binary variable in the logit regression model to identify factors that have an impact on technical efficiency, especially the ICT factor. The research results show that only nearly 10% of the provinces could be technically efficient in business activities. Provinces with sustainable performance and efficiency all depend on influencing factors such as equity ratio, labor productivity, market size, investment, and especially the ICT factor keep increasing over the years and fluctuate around a pretty high level. On the other hand, for the group of unsustainable and ineffective provinces, these variables tend to decrease and fluctuate around at a low level. The research shows that factors in labor productivity, equity ratio, market size, investment, and ICT all have a positive impact on a firm’s performance in 63 provinces and cities of Vietnam. Therefore, firms that want to enhance their efficiency need to have strategies to improve the factors mentioned above. Moreover, the local government needs to improve the ICT index to help to increase their local Enterprises’ efficiency.

Suggested Citation

  • Bui Thi Quynh Dao & Le Thi Thuy Hue & Nguyen Ngoc Van Khanh & Nguyen Lam Thanh Ngan & Vu Thuy Hong Phuoc, 2021. "The Impact of ICT on Technical Efficiency of Vietnam’s Enterprises," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 7(2), pages 65-73, 06-2021.
    • Handle: RePEc:arp:ijefrr:2021:p:65-73
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    References listed on IDEAS

    as
    1. Riccardo Lucchetti & Alessandro Sterlacchini, 2004. "The Adoption of ICT among SMEs: Evidence from an Italian Survey," Small Business Economics, Springer, vol. 23(2), pages 151-168, September.
    2. Habib Ntwoku & Solomon Negash & Peter Meso, 2017. "ICT adoption in Cameroon SME: application of Bass diffusion model," Information Technology for Development, Taylor & Francis Journals, vol. 23(2), pages 296-317, April.
    3. Vania Sena, 2004. "The Return of the Prince of Denmark: A Survey on Recent Developments in the Economics of Innovation," Economic Journal, Royal Economic Society, vol. 114(496), pages 312-332, June.
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